Per the S&P: We anticipate an increase in rebates and incentives to V's merchants to encourage issuance and acceptance of V's cards, due to competitive pressures.We also look for advertising expense to increase in the second half of FY 08, reflecting pending on the Summer Olympics. As a result, we look for operating margins to decline in the second half of FY 08 to roughly 42%, from the roughly 45% level achieved in the first half. Risks to our recommendation and target price include regulations that may limit interchange fees, negative outcome of pending litigation, customers branding their own charge cards, and a slowdown in consumer spending.
$78.5 (07/06/08)
